Madhya Pradesh High Court
District Cooperaive Agriculture And ... vs Bhagwan Lal Shivhare on 24 January, 2019
THE HIGH COURT OF MADHYA PRADESH
WA.1707.2018
District Co-operative Agriculture and Rural Development
Bank Ltd. Gwalior
Vs.
Bhagwan Lal Shivhare
1
Gwalior, Dated : 24.01.2019
Shri Raghvendra Dixit, learned counsel for
the appellant.
Shri Prashant Sharma, learned counsel for
the respondent.
Challenge, in this appeal under 2(1) of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyayapeeth Ko Appeal) Adhiniyam, 2005, is to an order dated 10.10.2018 passed in Writ Petition No.2241/2014 whereby the appellant is directed to refund the entire amount recovered from the gratuity along with interest of @ 8% per annum payable w.e.f. the date of superannuation i.e. 31.01.2007 till its payment.
The relevant facts briefly are that the respondent while in service was proceeded against in a departmental enquiry on the charges of financial irregularity. The charges were established whereon by order dated 11.02.2005 the respondent was saddled with the punishment of recovery of sanctioned loan amount with two more incumbents and the order of his suspension was revoked. The punishment order attained finality with the dismissal of WP.2541/09(s) on 13.07.2011. The amount which the respondent was found liable was Rs.2,48,001/-. As the THE HIGH COURT OF MADHYA PRADESH WA.1707.2018 District Co-operative Agriculture and Rural Development Bank Ltd. Gwalior Vs. Bhagwan Lal Shivhare 2 punishment order of recovery was from the dues of the respondent, the recovery was effected from his gratuity and other retiral dues and entitlements. That from the salary, amount of Rs.79,800/- was recovered. Whereas, Rs.1,68,201/- was recovered from the gratuity i.e. from Rs.2,51,515/-. It is this action of the appellant which has been set aside vide impugned judgment on the touchstone of the stipulations contained in the Act of 1972.
The Payment of Gratuity Act, 1972 was enacted to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments and for matters connected therewith or incidental thereto. Section 5 whereof empowers the appropriate Government, by way of notification and subject to such conditions as may be specified in the notification, exempt any establishment.
In the present case, learned counsel for the appellant does not dispute that the appellant establishment is not exempted. Thus, the provisions of Act of 1972 are applicable.
Sub-section (1) of Section 4 of Act of 1972 THE HIGH COURT OF MADHYA PRADESH WA.1707.2018 District Co-operative Agriculture and Rural Development Bank Ltd. Gwalior Vs. Bhagwan Lal Shivhare 3 stipulates that Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, (a) on his superannuation, or
(b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease.
Sub-section (6) of Section 4 carves out an exception to sub-section (1) stipulating that -
"(6) Notwithstanding anything contained in sub-section (1),-
(a) the gratuity of an employee, whose services have been terminated for any act, wilful omission or negligence causing any damage or loss to, or destruction of, property belonging to the employer, shall be forfeited to the extent of the damage or loss so caused;
(b) the gratuity payable to an employee may be wholly or partially forfeited -
(i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act or violence on his part, or
(ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude, provided that such offence is committed by him in the THE HIGH COURT OF MADHYA PRADESH WA.1707.2018 District Co-operative Agriculture and Rural Development Bank Ltd. Gwalior Vs. Bhagwan Lal Shivhare 4 course of his employment".
Section 14 stipulates that the provisions of Act of 1972 or any rule made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument or contract having effect by virtue of any enactment other than this Act.
The issue is as to when there is an imposition of penalty of recovery from the dues of the incumbent and the gratuity being due to an employee, whether it will be permissible for the employer to recover from the gratuity. The issue, in our considered opinion, is no more res integra in view of decision in "Bakshish Singh Vs. M/s Darshan Engineering Works and others [(1994) 1 SCC 9]" wherein it is held:
"16. ........The recognition of gratuity as a retiral benefit brought in its wake further modifications of the concept. It could be paid even if the employee resigned or voluntarily retired from service. The minimum qualifying service for entitlement to it, rate at which it was to be paid and the maximum amount payable was determined likewise on the basis of the said factors. It had also to be acknowledged that it could not be denied to the employee on account of THE HIGH COURT OF MADHYA PRADESH WA.1707.2018 District Co-operative Agriculture and Rural Development Bank Ltd. Gwalior Vs. Bhagwan Lal Shivhare 5 his misconduct. He could be denied gratuity only to the extent of the financial loss caused by his misconduct, and no more. .........."
Furthermore, in "Y.K. Singla Vs. Punjab National Bank and others [(2013) 3 SCC 472]", it is held:
"22. ......A perusal of Section 14 leaves no room for any doubt, that a superior status has been vested in the provisions of the Gratuity Act vis-à-vis any other enactment (including any other instrument or contract) inconsistent therewith. Therefore, insofar as the entitlement of an employee to gratuity is concerned, it is apparent that in cases where gratuity of an employee is not regulated under the provisions of the Gratuity Act, the legislature having vested superiority to the provisions of the Gratuity Act over all other provisions/enactments (including any instrument or contract having the force of law), the provisions of the Gratuity Act cannot be ignored. The term "instrument" and the phrase "instrument or contract having the force of law" shall most definitely be deemed to include the 1995 Regulations, which regulate the payment of gratuity to the appellant.
24. Furthermore, from the mandate of Section 14 of the Gratuity Act, it is imperative to further conclude, that the THE HIGH COURT OF MADHYA PRADESH WA.1707.2018 District Co-operative Agriculture and Rural Development Bank Ltd. Gwalior Vs. Bhagwan Lal Shivhare 6 provisions of the Gratuity Act would have overriding effect, with reference to any inconsistency therewith in any other provision or instrument........"
In view whereof, when the impugned order is tested on the anvil of above analysis as also the decision relied upon by the learned Single Judge clinching the issue as regard to recovery from gratuity, we perceive no illegality in the order, as would warrant any indulgence.
Consequently, appeal fails and is dismissed. No costs.
(Sanjay Yadav) (Vivek Agarwal)
Judge Judge
pd
PAWAN
DHARKAR
2019.01.2
5 18:29:42
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